401.11.1 Types of Guarantees
With submittal of the application for final plan approval, the applicant shall provide one of the following performance guarantees for an amount adequate to cover the total construction costs of all required improvements, taking into account the time-span of the construction schedule and the inflation rate for construction costs:
A. Cash - Either a certified check payable to the municipality or a savings account or certificate of deposit naming the Town of Gray as owner, for the establishment of an escrow account;
B. Letter of Credit - An irrevocable letter of credit from a financial institution approved by the Town Attorney establishing funding for the construction of the subdivision, from which the Town may draw if construction is inadequate.
C. Conditional Agreement – A restriction on the sale of lots and issuance of building permits within the subdivision until the required improvements are completed. A letter of credit or cash fund shall be required to cover the cost of erosion controls and site stabilization. The restriction on lot sales and building permits shall be lifted at any point in the construction process where a performance guarantee under subsections A or B above is posted for the remaining improvements. The owner of a subdivision approved by the Planning Board prior to November 10, 2008 (December 10 effective date) may ask to amend the subdivision approval to add or substitute a conditional agreement provision under this subsection. Such an amendment will require the
review and approval of the Planning Board and must comply with all of the requirements of this subsection, but may not request any other plan changes under the design requirements or review standards. Approval of a plan amendment under this subsection shall not extend the time periods established by Section 401.8.3(C) or (G). [Amended March 17, 2009]
The conditions and amount of the performance guarantee shall be determined by the Planning Board with the advice of the Town Engineer, Public Works Director, and Town Attorney.
401.11.2 Contents of Guarantees
The performance guarantee shall contain a construction schedule, cost estimates for each major phase of construction taking into account inflation, provisions for inspections of each phase of construction, provisions for the release of part or all of the performance guarantee to the developer, and a date after which the applicant will be in default and the municipality shall have access to the funds to finish construction. Said default date shall be at least sixty (60) days prior to expiration of the performance guarantee.
401.11.3 Cash Escrow Account
A cash contribution to the establishment of an escrow account shall be made by either a certified check, the direct deposit into a savings account, or the purchase of a certificate of deposit. For any account opened by the applicant, the municipality shall be named as owner. Any interest earned on the escrow account shall be returned to the applicant unless the municipality has found it necessary to draw on the account due to default of the developer.
401.11.4 Letter of Credit
An irrevocable letter of credit from a bank or other lending institution with offices in the region, shall indicate that funds have been set aside for the construction of the subdivision for the duration of the project and may not be used for any other project or loan.
401.11.5 Phasing of Development
The Board may approve plans to develop a major subdivision in separate and distinct phases. This may be accomplished by limiting final approval to those lots abutting that section of the proposed subdivision street which is covered by a performance guarantee. When development is phased, road construction shall commence from an existing public way. Final approval of lots in subsequent phases shall be given only upon satisfactory completion of all requirements pertaining to previous phases and with posting of a new performance guarantee for the next phase. Preliminary subdivision approval of all development phases in a phased subdivision shall establish vested rights against future ordinance changes provided that adequate design documentation is submitted to verify that all project phases meet all
ordinance requirements in effect at the time of final approval of the first project phase.
401.11.6 Release of Guarantee
Prior to the release of any part of the performance guarantee, the Town Manager or his/her designee shall determine to its satisfaction, in part upon the report of the Town Engineer or other qualified individual retained by the municipality and any other agencies and departments who may be involved, that the proposed improvements meet or exceed the design and construction requirements for that portion or phase of the subdivision for which the release is requested.
401.11.7 Default
If upon inspection, the Town Engineer or other qualified individual retained by the municipality finds that any of the required improvements have not been constructed in accordance with the plans and specifications filed as part of the application, he or she shall so report in writing to the Code Enforcement Officer, the Town Manager, the Board, and the applicant or builder. The Town Manager shall take any steps necessary to preserve the municipality's rights.
401.11.8 Improvements to be Covered by Guarantees
Performance guarantees shall be tendered for all public or common improvements required to meet the standards of these regulations including but not limited to the construction of the streets, storm water management facilities, public sewage collection or disposal facilities, public water systems, and erosion and sedimentation control measures.
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